In recent years, ESG (environmental, social and governance issues) has become a strategic priority in the real estate industry and the topic is currently high on the agenda. More and more buildings are becoming climate-smart and “green houses” and “green investments” are everyday expressions in the property industry. ChromoGenics have reviewed the EY US case study that quantified the impact of ESG investments on property values.

ESG is a concept that encompasses all sustainability issues that affect companies and organizations. It can range from climate change and human rights to corporate governance and sustainability reporting. A green investment is an investment that aims to promote environmental sustainability and reduce the impact on the climate. The ESG investment strategy can include green investing by having investors assess companies’ performance in areas such as climate change and environmental impact. By using ESG frameworks, such as the UN Global Compact, GRI Standards and SASB, investors can choose to invest in companies that are committed to green technology or that have a positive environmental impact. On that note, ESG investments can contribute to a more sustainable and green future.

How does investing in a property with a focus on ESG generate value for investors? To assess the economic impact of sustainability, Ernst & Young LLP (EY US) conducted a hypothetical case study in 2022 to analyze and quantify the impact of ESG on real estate valuations. EY’s experts specifically examined the key assumptions used in the income approach to highlight areas where ESG impacts property value.

According to the study by EY US, 82% of respondents believe that ESG is very important or more important than other factors in strategic decisions (in 2019 it was 43%). Property owners and investors have felt that the cost of building sustainable buildings with ESG in mind has been daunting. But in the long term, it has been proven to be a sustainable investment as the green buildings contribute to a reduced environmental impact by reducing energy consumption, water use and greenhouse gas emissions. They also improve resident satisfaction as these houses often include good ventilation, natural light and the use of non-toxic materials. Finally, a building with strong ESG performance can also attract investors and tenants, which can lead to higher rental income and property values.

The primary interest of residents is health and well-being, but an increasing number are also interested in having a residence that aligns with the company’s sustainability strategies. Other benefits of a building designed with ESG in mind include tax incentives, favorable financing and most importantly – a sustainable future.

ChromoGenic’s dynamic glass has environmental aspects that can reduce energy consumption and carbon dioxide emissions. This is achieved by reducing the need for artificial lighting and cooling in a building. By reducing energy consumption, buildings that use these glasses can contribute to a reduced environmental impact. The use of our dynamic solar control glass contributes to the well-being and productivity of tenants by increasing natural daylight, providing unobstructed views, and improving indoor climate.

Investments in ChromoGenics’ dynamic glass can be seen as part of good and green corporate governance, as the company has a clear environmental strategy and sustainability vision. In addition, ChromoGenics can contribute to a circular economy through its operations by recycling glass and reducing waste. In summary, ChromoGenics’ dynamic glass can have a positive impact on the environment, society, and corporate governance by reducing energy consumption, improving health and productivity, and having a sustainability vision for its operations.

Read more about ConverLight® Dynamic glass.

Read EY:s study.